PETALING JAYA, June 14 — Penang Chief Minister Lim Guan Eng responded to Barisan Nasional's allegations that his administration was financially unsustainable by calling the federal government a failure.

He insisted that Penang was not headed for failure or bankruptcy as suggested, and was instead regularly commended in the Auditor-General's annual reports.

"BN might not be very good at managing finance but they good at corruption and telling lies.

"BN itself is a failed government, many years in charge (of Penang) they have recorded deficits. Every year their debt increases, but our debts go down,” he said in a press conference today.

The DAP secretary-general said that under his party's rule, the state's debt has been reduced and without sacrificing forest reserves.

He also pointed out unlike previous BN administrations in Penang, all state government contracts were now awarded via open tender.

BN last week challenged Lim to confirm or deny that his administration sold RM37 billion in state land since 2008 and if the Penang Transport Masterplan project went from costing RM27 billion to RM46 billion in a year, among others.